UBL Funds Delivers Strong FY26 Results as Markets Navigate Economic and Geopolitical Shifts

UBL Fund Managers Limited’s Annual Report for the year ended June 30, 2026 highlights a year of significant activity across Pakistan’s financial markets, with the company’s conventional funds generating substantial income while navigating changes in monetary policy, inflation, exchange rates and geopolitical conditions.

Pakistan Economy Shows Resilience

According to the annual report, Pakistan’s economy demonstrated resilience during FY26 despite several challenges. Headline inflation averaged 7.0%, compared with 4.5% in the previous year, while workers’ remittances increased 8.6% year-on-year to $41.6 billion. The country’s foreign exchange reserves reached $18.3 billion by the end of the fiscal year.

Provisional real GDP growth was estimated at around 3.7%, supported by improved crop production and growth in large-scale manufacturing. The report also notes that Pakistan completed two IMF programme reviews, resulting in total disbursements of $2.5 billion, while the government raised $750 million through a Eurobond issuance.

Debt Markets Remain Volatile

Pakistan’s debt market experienced changing conditions during FY26 as expectations around monetary policy shifted. After a 50-basis-point policy rate cut in December 2025, investors initially anticipated further easing. However, geopolitical tensions and inflation concerns subsequently changed market expectations, followed by a 100-basis-point policy rate increase by the State Bank of Pakistan.

Treasury bills continued to attract strong demand, with total bids reaching PKR 56.7 trillion and the government raising PKR 23.63 trillion. Demand was particularly concentrated in shorter maturities, with one-month T-bills accounting for 39.5% of total participation.

Strong Performance in the Equity Market

The report also highlights a strong year for Pakistan’s equity market. The KSE-100 Index delivered a 44% return during FY2025-26 and closed at 180,302. Commercial banks, fertilizers and energy-related companies were among the major contributors to the index’s performance.

However, the report notes that market performance was concentrated largely in the first half of the fiscal year, while the second half experienced greater volatility amid geopolitical tensions.

UBL Funds Post Substantial Income

UBL’s conventional fund portfolio recorded notable financial results during the year.

UBL Liquidity Plus Fund generated total income of PKR 1.619 billion and net income of PKR 1.437 billion, while UBL Liquidity Fund posted total income of PKR 3.864 billion and net income of PKR 3.680 billion. UBL Cash Fund recorded net income of PKR 1.444 billion and maintained a AAA+(f) rating from PACRA.

UBL Money Market Fund reported total income of PKR 5.554 billion and net income of PKR 4.910 billion. Its net assets stood at PKR 55.583 billion at June 30, 2026. UBL Government Securities Fund generated net income of PKR 1.140 billion.

Equity-oriented funds also reported significant results. UBL Stock Advantage Fund recorded total income of approximately PKR 7.968 billion, while UBL Asset Allocation Fund reported net income of PKR 616.337 million. UBL Financial Sector Fund generated net income of PKR 1.492 billion after expenses.

Outlook for FY27

Looking ahead, UBL Fund Managers expects Pakistan’s economic environment to remain influenced by inflation, monetary policy, geopolitical developments and fiscal performance. The report projects FY27 inflation at around 8.0% to 8.5%, above the State Bank’s medium-term target range of 5% to 7%.

The report also highlights expected remittances of $44 billion and identifies developments such as progress on gas circular debt, economic activity, interest rates and commodity prices as factors that could influence the equity market.

Overall, UBL Fund Managers’ FY26 annual report presents a detailed picture of a financial year marked by strong market activity, substantial fund income and changing macroeconomic conditions. Its results also underline the diverse nature of Pakistan’s investment landscape, where money-market, fixed-income and equity-oriented funds responded differently to shifts in interest rates and market sentiment.